PITTSBURGH - State environmental regulators want Norfolk Southern Railroad (NYSE: NSC) to pay $8.89 million in fines for a derailment that fouled a once-pristine fishing creek with lye.

The Department of Environmental Protection filed a complaint seeking $5.41 million for alleged violations of the state's Clean Streams Law. That would cover damage to Sinnemahoning-Portage Creek and related waterways affected by the June derailment near the village of Gardeau in north-central Pennsylvania.

The DEP also assessed a $3.48 million civil penalty for unpermitted disposal of wastes and the release of hazardous substances at the site.

Union officials have said the train was going 73 mph down a steep hill when it derailed at a point where the track's speed limit is 15 mph. Norfolk Southern cited the engineer and conductor for improper train handling and speeding, and have vowed to help clean up the pollution.

Railroad spokesman Rudy Husband said "the fines are unwarranted and not supported by facts or law. We definitely will appeal the fines."

The lye, which spilled from three tank cars, killed fish and other life in the Big Fill Run, where the train derailed, and a 7.5-mile segment of Sinnemahoning-Portage Creek. It also tainted the Driftwood Branch of Sinnemahoning Creek.

3Q earnings in military sector robust

NEW YORK - Investors backed off shares in military contractors this week despite robust earnings reports from three of the sector's biggest players.

Military and aerospace stocks have enjoyed a strong run-up since the start of the year, with the Spade Defense Index up 14.7 percent through Monday - which marked the start of the industry's third-quarter reporting period - outpacing the broader S&P 500 index, which is up 8 percent for the year.

But the Spade index is off more than 2 percent since Monday. United Technologies Corp. and General Dynamics Corp. (NYSE: GD) fell while Textron Inc. rose slightly. All three reported solid earnings. Lockheed Martin Corp. and Northrop Grumman Corp. are due up next week.

Shares in General Dynamics fell sharply Thursday after the maker of military hardware, private jets and information technology reported lower-than-expected third-quarter sales, and two research analysts downgraded the stock, citing a yearlong run-up in its value.

General Dynamics was off 35 cents to $72.10 in recent trading Friday on the Big Board. It started the week at $77.70 on Monday.